China's central bank cuts two key benchmark interest rates

China's central bank cuts two key benchmark interest rates

China's central bank on Tuesday cut two benchmark interest rates, following several similar measures last week in an attempt to counter the post-Covid growth slowdown in the world's second-largest economy.

The one-year Loan Prime Rate, which serves as a benchmark for corporate loans, was reduced from 3.65 percent to 3.55 percent, the People's Bank of China (PBoC) said in a statement, while the five-year LPR, which is used to price mortgages, was cut from 4.3 percent to 4.2 percent.

Last Thursday the central bank also lowered two other key rates and pumped billions into financial markets, as fresh data showed the economy continued to struggle.

With Tuesday's cuts, the policy easing moves are the most significant by leaders who are trying to invigorate growth after recent indicators showed a hoped-for strong recovery following years of lockdown-induced slowing was running out of steam.

China's efforts contrast with those in the United States and other Western countries, which have been forced into a series of interest rate hikes while reducing money supply to tame inflation.

Officials last Thursday lowered the medium-term lending facility (MLF) rate -- the interest for one-year loans to financial institutions -- 10 basis points to 2.65 percent.

The PBoC also said it was offering 237 billion yuan ($33 billion) of funds to banks through the medium-term lending facility, "to maintain reasonable and sufficient liquidity in the banking system".